How_does_the_system_calculate_the_new_asset_cost_and_depreciation_

How does the system calculate the new asset cost and depreciation?

Understand the calculated ratio

If you need to know how the system will calculate a split asset, this section will show you the calculations that the system will use to determine the new asset cost and new asset depreciation. In order to complete these calculations, the system uses a calculated ratio that is based on the method that is being used to split the asset. For example, if the asset is split based on amount, then the calculated ratio is the New Asset Total Cost / Asset to Split Total Cost.

Use the following table to see how the system will generate the calculated ratio. An asterisk (*) means the Calculated Ratio will be rounded to the nearest whole number.

Method to split assets

  • Split assets based on an amount. Calculated Ratio* = Total Cost of New Asset / Total Cost of Asset to Split

  • Split assets based on a percentage. Calculated Ratio = Percentage Assigned to New Asset

  • Split assets based on unit. Calculated Ratio* = # of Units of New Asset  / # of Units of Asset to Split

 

Split asset based on amounts

When an asset is split based on amounts, the system will use the following calculations:

  • Calculated Ratio* = # of Units of New Asset  / # of Units of Asset to Split

  • New Asset Cost = Total Cost of Asset to Split  x Calculated Ratio

  • New Asset Depreciation = You enter this amount.

 

Split asset based on units

When an asset is split based on units, the system will use the following calculations:

  • Calculated Ratio* = Total Cost of New Asset  / Total Cost of Asset to Split

  • New Asset Cost = Total Cost of Asset to Split  x Calculated Ratio

  • New Asset Depreciation = Total Depreciation of Asset to Split x Calculated Ratio

 

Split asset based on percentage

When an asset is split based on percentage, the system will use the following calculations:

  • Calculated Ratio = # of Units of New Asset  / # of Units of Asset to Split

  • New Asset Cost = Total Cost of Asset to Split x Calculated Ratio

  • New Asset Depreciation = Total Depreciation of Asset to Split x Percentage of New Asset


 

 

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